Technical Analysis

Friday the 13th for the financial market: From horror show to thriller show

Akhil Nallamuthu BL Research Bureau | Updated on March 14, 2020 Published on March 14, 2020

Indian investors went through a stomach churning roller coaster ride on Friday, swinging from extreme despair to euphoria. The two halves of the session were sharply in contrast.

The rout in the US benchmark indices which lost nearly 10 per cent on Thursday had already set the tone for Friday’s opening. The Asian markets took cues from the US markets and fell sharply. Indian markets followed the Asian markets’ lead.

Watching all this unfold overnight, market participants in India were bracing for a huge gap-down open. Nothing was going to stop the bears who had tightened their grip on the market over the past two weeks.

Within few minutes of the start of trading, both benchmark indices hit the first lower circuit breaker as the intraday losses hit 10 per cent. This saw trading in the stock markets halt for 45 minutes. This was followed by another pre-market session that lasted for 15 minutes. In effect, the trading restarted after one hour.

Then came the tale of the second half

In the second pre-market trading session during the day, the indication was that there would be a lower opening. Taking everyone by surprise, after the markets reopened, the benchmark indices—Nifty50 and Sensex—rose by 1,601 points and 5,490 points to the day’s highs. It was as if the bears had suddenly given way to the bulls. And what happened in early trade was all but a distant memory.

The benchmark indices had their best intra-day rally ever and registered their respective intraday highs at 10,156 (Nifty50) and 34,768 (Sensex). By the end of the session, the benchmark indices moderated and closed at 9,955 and 34,103, with a gain of 4 per cent each.

Nifty50 and Sensex ended 1400 points and 4825 points up from their respective lows. The closing price of the Nifty spot and the Sensex spot indices on Thursday was 9,590 and 32,778 respectively.

The contrast was also seen among the institutional investors. While the Domestic Institutional Investors (DII) made a net investment of about ₹5,868 crore, the Foreign Institutional Investors (FII) net sold ₹6,027 crore, as per the latest data by the National Stock Exchange of India (NSE).

Top sectoral gainers (NSE)

The Nifty PSU bank index was the top performing sectoral index as the stock of State Bank of India (SBI) rallied strongly. The index gained 10.7 per cent yesterday. SBI was eventually the top gainer among the Nifty 50 stocks, posting a gain of about 14 per cent. The Nifty metal index and the Nifty financial services index too performed well, gaining about 5.7 per cent each. The only sectoral index that posted loss was the Nifty media index, losing nearly 1.7 per cent.

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Published on March 14, 2020
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